What is a Cost Order?

Legal costs are incurred in all cases. The unsuccessful party will be responsible for paying the costs incurred by the successful party in an inter-partes matter. A cost order, put simply, is an Order made by a Judge, under CPR 44, to decide whether costs are payable, and the level of costs payable by the unsuccessful party, to the successful party.

 

When can a Cost Order be Made?

A Judge can award costs at any stage throughout a case. There are different types of cost orders, such as final costs orders, which are made on conclusion of a case, and interim costs orders, made following an interim hearing.

 

After Which Type of Hearing Can a Cost Order be Granted?

An order for costs can be granted after any court case or hearing, including a disposal hearing, an application hearing, or a trial. A successful party can also claim costs following acceptance of a part 36 offer, or after the filing of a Notice of Discontinuance.

 

What Should I Do if I Have Received an Order for Costs?

When you have received an order for costs, you should check to see if the order is made against you, or in your favour. You should also check if the costs are summarily assessed or ordered for detailed assessment.

Summarily Assessed Costs

If you have received an order for costs against you for summarily assessed costs, this means that you should pay the costs awarded to the receiving party within 14 days, unless otherwise stated. The amount payable should be stated on the order.

If you have received an order for costs in your favour for summarily assessed costs, this means costs are owed to you by the paying party and should be paid within 14 days.  If payment is not received, then enforcement action can be taken via various methods, including a Warrant of Control, Warrant of Possession or Third Party Debt Order.

Costs Ordered for Detailed Assessment

If you have received this type of order against you, you should wait for the receiving party to serve their bill of costs and Notice of Commencement. You should then file any Points of Dispute within 21 days as required by CPR 47.9. You should then wait for the receiving party’s Points of Reply and attempt to negotiate a settlement before proceeding to an assessment hearing.

If you have received a cost order for detailed assessment in your favour, you should instruct a Costs Draftsman to advise on the costs you can recover, and to prepare and serve your Bill of Costs on the paying party alongside the Notice of Commencement. This will initiate detailed assessment proceedings and you should attempt to negotiate a settlement before proceeding to an assessment. In an attempt to negotiate a settlement, you should wait for the paying party’s Points of Dispute and respond with your Points of Reply.

If the paying party do not send their Points of Dispute within 21 days, you will be able to apply for a Default Costs Certificate for the full amount claimed in the Bill of Costs.

 

How Can LPS Assist?

The Legal Practice Support team are always happy to help with any costs issues, including negotiating your bill of costs. Our Costs Director, Robert Collington, can be contacted via email on info@legalpracticesupport.co.uk or by telephone on 01204 930234.

If you would like to find out more information on preparing your cost budget, bill of costs, or the process of detailed assessment, have a look at these sections on our website. Feel free to have a look at our legal costs section to find out more about out legal costs services.